14 November 2023 – The 36 clubs of the Bundesliga and Bundesliga 2 will address a number of topics, including the conclusion of a strategic marketing partnership at league level, at a DFL Members Assembly on 11 December 2023. At a joint meeting held today, a majority of the club representatives from both the Executive Committee of DFL e.V. and the Supervisory Board of DFL GmbH voted in favour of preparing a request for a marketing partnership and putting a related vote on the agenda of the Members Assembly, in order to lay a broad foundation for such a decision among the 36 clubs. Discussions had been held with representatives from the clubs in the run-up to today’s meeting.
In the past few months, the league governing bodies and the DFL management team have been working hard on the future direction of Germany’s two top leagues, and they are in agreement that the DFL’s business model needs refinement in order to ensure a positive long-term future for the Bundesliga and Bundesliga 2. This is because the DFL is not a football association in the traditional sense – it is a company that operates in global media markets by selling media rights for the broadcast of German professional football matches. These markets are in the midst of major changes due to a number of factors: the establishment of streaming services as new providers, which has resulted in the round the clock availability of sporting content; new media consumption habits among younger generations in particular; changed organisational and staffing structures at global media corporations, and an increase in rival offerings as a consequence of the expansion of international competitions.
These developments have forced the league and clubs to act. However, these changes also present great opportunities that must be taken now in order to ensure long-term success and maintain the Bundesliga and Bundesliga 2 as institutions that are competitive in sporting and economic terms, as well as remaining deeply rooted in society.
There is also agreement that this refinement requires initial investment in order to set up the Bundesliga and Bundesliga 2 for the future. This is particularly important with regard to various business areas of the DFL, which is responsible for the marketing and organisation of the leagues according to its statutes. Key starting points are the further development of the national media product, in close cooperation with current and future partners through new offerings and formats; the fight against digital piracy (illegal live streams); the expansion of international activities and marketing of the Bundesliga and Bundesliga 2; digitalisation of the leagues, including by expanding global Bundesliga platforms; and increasing the range of partnerships in the field of sponsorship and licence rights.
Against this backdrop, in-depth discussions have been held with representatives of the clubs and the DFL in recent weeks regarding the shape that a refinement can and should take. The main aim was to engage with the clubs transparently regarding the current position, opportunities, requirements for implementation, and questions relating to the strategic refinement and financing options before any more firm plans are made. Measures here included two comprehensive meetings with clubs in Frankfurt in November. The management team announced and explained this course of action at the press conference following the most recent Members Assembly on 9 October.
Key points and “red lines” for the possible conclusion of a strategic partnership at league level were also discussed at these meetings. In particular, the DFL also took findings from the process conducted in spring 2023 into account, in coordination with the league governing bodies.
Examples of key guidelines include:
- Interest in licensing revenue and not a sale of shares in the DFL: A sale of shares in the DFL itself – giving a partner a say in the running of DFL e.V. or DFL GmbH – is out of the question. To safeguard the clubs’ interests, the plans instead provide for a temporary minority interest in licensing revenue from the sale of DFL e.V.’s commercial rights. Models of this kind are not new in football: for instance, many clubs have had marketing partners “on board” to provide support over the last 20 years. This means that the clubs have concluded extensive marketing agreements under which the marketer has received a specific percentage of the generated revenue as remuneration. In business areas such as sponsorship and marketing, marketers have often delivered added value for the clubs above and beyond financial aspects over a set period. The clubs have expanded their expertise and their network, become more professional – and, in many cases, continued marketing without a partner after the end of the collaboration.
- The DFL always has full control of match scheduling and kick-off times: Organisation of match operations (in particular match scheduling) will always remain the full responsibility of the DFL. The plans for a strategic marketing partnership do not include a partner’s right to determine competitive matches abroad, kick-off times or other aspects of match scheduling.
- No flooding of the market with cash: The current plans are focused on one key pillar: the above-mentioned refinement of the DFL’s central marketing in the interest of a positive future for the leagues and clubs. Consequently, most of the growth capital from a strategic marketing partnership is intended to be channelled into the DFL’s business development – with the aim of investing now to increase revenue from central marketing on a long-term basis, which would benefit all clubs. Payments to compensate for a strategic partner’s minority interest in licensing revenue are intended as a major ongoing distribution to the clubs. This means that this money would be distributed to the clubs in the years ahead, even if a strategic partnership is not concluded. Therefore, a strategic partnership will not result in “more money in the pockets of players andagents”, contrary to some suggestions.
Further support payments for specific club measures, for instance in the area of international travel, would be provided on the basis of established “rate-card” mechanisms, as has been customary for years (by way of example, information on the current rate card for internationalisation can be found here). Support payments would only be made for the actual execution of measures. The precise mechanisms and a revised rate card will be devised in due course by the DFL in tandem with the “Internationalisation Committee”, comprising representatives of twelve clubs.
- No debt: After a temporary minority interest expires, the licensed rights would automatically return to DFL e.V. Unlike in the case of borrowing outside capital, for example – already ruled out by the DFL governing bodies – there would be no need to repay the growth capital (including interest), which would pose challenges for future generations of league and club officials. Instead, the capital would be covered via the temporary interest of a partner.
- The principle of 50+1 is also taken into account at league level: Any kind of partnership would involve a clearminority interest – as is already customary at many Bundesliga and Bundesliga 2 clubs. The league and clubs remain constantly in control of activities. One aspect of the new concept is that the level of a strategic partner’s temporary minority interest in licensing revenue from the sale of DFL e.V.’s commercial rights is intended to be lower than in previous processes – a single-digit percentage is envisaged.
- Decision-making power remains with the clubs: It is the DFL’s task to develop and put forward options regarding the refinement in conjunction with the governing bodies. Final decisions on a potential strategic partnership will be made by the Members Assembly of DFL e.V. as the highest body.
- Regulation as a further key pillar: Regardless of a possible strategic partnership, and as in previous years, the DFL will continue to work hard with German clubs to limit the irrational financial conduct of certain leagues and clubs in Europe, and to make German football more competitive.
Based on the key points discussed with the clubs, and the proposals from the governing bodies as well as the club discussion rounds, the next step is to continue working on the details for referral to the Members Assembly before 11 December, when the 36 clubs will vote on whether a strategic marketing partnership should be initiated at league level for the further development of the Bundesliga, Bundesliga 2 and the DFL.
Would you like to find out more about this topic? Click here for answers to frequently asked questions about a possible strategic partnership at league level.